Well what better than to wrap up and summarize 2017 than with the Cheesy Index? In this December 2017 Cheesy Index post we will also look at the portfolio allocation and some random financial statistics, which also showed we were FI in 2017! Too bad that from a cash-flow perspective we still have a long way to go….
December 2017 Cheesy Index
Despite not having posted the December savings rate or dividend incomes yet, we could already see that 2017 was going to be a great year for the Cheesy Index (see also the post form last month). We closed out the year with a Cheesy Index with a total of 69%! Just look at all the cheese stacking up, it’s just pretty ;-). We also shot past our 65% target for the year, in largely thanks to the stock market and our Real Estate income.
Here are the stats:
As you might be aware, we have divided our assets into three classes:
- Income generating assets (stocks, real estate, loans, etc.);
- Non-income generating assets (cash, our house, art, jukebox, etc.); and,
- Depreciating assets (i.e. our car).
If you look at these three assets classes, and their development in 2017, you get this:
It is hard to miss the shift from ETF’s and Dividend shares to a Real Estate loan in November/December. But we now have more than 85% of our available wealth invested, that is good! However, we now have to work at getting some more cash for 2018. Primarily to pay for maintenance on our real estate and a 9 week road trip holiday (partially unpaid) in Q2 2018.
Portfolio Allocations – Income Assets
When you now breakdown the income assets into the following categories:
- Our real estate;
- The dividend shares;
- Our Index funds;
- The various crowdfunding loans;
- Some sustainable investments (solar/wind); and finally,
And you dump all that into a graph for 2017, it looks like this:
As you can see, we are now heavily invested into Real Estate, followed by dividend shares. We currently have virtually no ETF’s anymore, very little crowdfunding left and only small positions in sustainable investments and crypto currencies. It’s unlikely that there will be major changes in this final distribution (from December 2017) during 2018.
Random Statistics and why we were FI in 2017 (and why not)
Ok, now for the fun part, here are some random statistics and notes for the financial year 2017:
- Overall expenses covered by total investment income (before taxes): 107.6% (the bank decided to shift some charges to 2018, so it went up since this surprisingly popular tweet)
- Total core expenses (excludes daycare and holidays/leisure expenses) covered by total investment income (before taxes): 149.7% (holy heck!!)
- Total core expenses (excludes daycare and holidays) covered by net cash-flow (including estimated taxes): 91.8%
- Target FIRE expenses covered by current net cash-flow (including estimated taxes): 83.9%
- Overall 2017 return on investment (on income assets): 8.2%
- 2017 was our highest income year on record, just a but higher than our previous record high from 2012
- Net Worth increase in 2017: 20.1%
As you can see both taxes and cash-flow limitations are “killing” us right now. That being said, due to higher than expected yields we are close to FIRE than the cheesy index makes us believe. This is also not influenced by market valuations, which is promising!
Slowly but surely getting there! How about you?